Murine myeloid leukemia M1 cells undergo terminal differentiation to mature macrophages after stimulation with IL-6. This cell line serves as a unique model for studying the molecular and cellular events occurring during the process of myeloid differentiation. One marker of myeloid differentiation is the expression of the inducible enzyme nitric oxide synthase (iNOS). This enzyme catalyzes the production of nitric oxide (NO) which is involved in anti-bacterial and anti-tumor actions of macrophages. The present study was undertaken to elucidate the mechanism of transactivation of the iNOS gene expression. Our studies showed that iNOS expression is transcriptionally regulated by IL-6 in M1 cells and therefore, we focused on the role of transcription factors in the induction of iNOS gene expression by IL-6 during differentiation. Our studies targeted the proximal 5' region of the iNOS promoter since this region has been shown to contain several important transcriptional regulation sequences and was shown to directly mediate iNOS gene activation. We have identified several DNA-binding complexes which are induced by IL-6 and bind to several regions of the iNOS promoter. The induction of these DNA-binding complexes correlated with the kinetics of expression of iNOS mRNA induced by IL-6. In addition, we identified an octamer consensus sequence in the iNOS promoter. Methylation interference studies demonstrate two specific guanine residues within the octamer region which are essential for IL-6-induced octamer binding protein interaction with DNA.